Covid Might have the World staring at a Major Food Crisis

Context: Covid-19 pandemic induced panic buying, food hoarding and protectionism could amplify the risk of worldwide food shortage and spike in global food price.

Reasons behind Food Price Hike

• Supply shock to global grain stockpiles: Because of disrupted food production and distribution. 
• Increased cost of farming and risk of bad harvest: due to absence of animal feed, fertilizers, & pesticides.
• Labour and transportation shortages: Due to cross-border travel restrictions, which will disrupt seasonal cycle of migrant farm workers.
• Export bans or quotas and stockpiling through imports.
• Food Protectionism: World Bank estimates that protectionism accounted for about 40% of the increase in the global price.
• Covid-19 pandemic has accelerated the rate of food price hike because of falling growth, rising unemployment, widening fiscal deficits, and soaring debt in advanced and emerging economies.

• Low-income countries: with stop in capital and remittance inflows and a collapse in tourism are highly vulnerable to a spike in food prices.

Global Initiatives to curb Food Price Hike

• Multilateral institutions lead emergency loans facility.

• Temporary suspension of debt-service payments from poor countries by Group of 20 creditors

• Reconfiguration of supply chain by farmers, away from bulk wholesale (to restaurants, hotels, and schools) toward grocery stores and home delivery. 
• Extension of Temporary debt relief to other countries apart from poor countries.
• Global policy coordination is essential to prevent food protectionism.